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Question : Assertion (A): Currency money is also termed as Fiat money.

Reason(R): Under law, currency must be accepted for payment for all debts.

Option 1: Both Assertion (A) and Reason(R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason(R) are true, but Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true, but Reason (R) is false.

 

Option 4: Assertion (A) Is false, but Reason (R) is true.


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 27th Jan, 2024

Correct Answer: Both Assertion (A) and Reason(R) are true and Reason (R) is the correct explanation of Assertion (A)


Solution : The correct answer is (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Assertion is termed as Fiat money, which is true. Fiat money refers to money that has value because the government declares it to be legal tender, not because it is backed by a physical commodity like gold or silver.

Reason is also true, as legal tender laws require creditors to accept currency as a form of payment.

Therefore, both Assertion (A) and Reason (R) are true, and Reason (R) correctly explains Assertion (A).

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